How Tumblr Saved Itself ~$20 Million With One Simple Move

Tumblr generated $13 million in revenues during
2012, according
to Forbes, and it hopes to be profitable in 2013.

One reason profitability is even within the realm of possibility
is that the company finally made a hard, but smart choice toward
the end of last year.

It moved off of third-party servers and built its own data
center, which came online in October.

Tumblr CEO David Karp won't get specific about how much the
company saved doing this, but a couple sources close to the
company that we've talked to say that Tumblr's burn rate moved
from $4 million to $5 million per month down to ~$2 million.

That's annual cost savings of more than $20 million per year.

Correction: An earlier version of this story
said that Tumblr moved off Amazon Web Services. It did not. It
moved hosting/serving/processing off of an ISP based
in Dallas to its own data center in Newark. Amazon is still used
for Tumblr's static image storage.

Disclosure: Jeff Bezos is an investor in Business Insider through his
personal investment company Bezos Expeditions.